Exports hit lowest level for almost five years

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The UK’s trade deficit widened over the start of 2015 as goods exports fell to their lowest quarterly level for nearly five years, official figures showed yesterday.

Economists said the figures helped explain the sharp slowdown in economic growth for the first three months of the year to 0.3 per cent and that the strength of the pound against the euro would be likely to continue to weigh on exports.

They will reinforce concerns that the recovery remains heavily skewed towards the domestic economy despite efforts at rebalancing.

The overall trade deficit of £7.5bn for the first quarter was £1.5bn higher than in the fourth quarter of 2014.

On a monthly basis, the shortfall narrowed from £3.3bn in February to £2.8bn in March, but only because February’s figure was revised sharply higher.

In the first quarter, goods exports fell by £2.7bn to £71.6bn, their lowest level since the third quarter of 2010.

The slump reflected a sharp fall in exports of fuel to EU coun- tries.

On a monthly basis, the UK’s goods deficit narrowed from £10.8bn to £10.1bn while the surplus in services fell from £7.5bn to £7.3bn.

Vicky Redwood, chief UK economist at Capital Economics, said: “March’s trade figures help to explain some of the slowdown in GDP growth in the first quarter.”